Brief No: RBX 14-01
September 2001
EMPLOYERS SKILL SURVEY 2001
Terence Hogarth, Jan Shury, David Vivian & Rob Wilson
IFF Research Ltd and Warwick Institute for Employment Research
Background
The Employers Skill Survey follows up the 1999 survey of the same name, commissioned as part of
the programme of research to support the work of the National Skills Task Force (NSTF). The
survey assesses external (skill shortage vacancies) and internal (skill gaps) skill deficiencies. Skill
shortage vacancies are the sub-set of hard-to-fill vacancies that are caused by a lack of suitably
skilled, qualified or experienced applicants. Internal skill gaps relate to areas in which an employer’s
existing workforce are perceived to be below the desired level of proficiency (definitions reflect
those developed by the National Skills Task Force).
27,000 employers were interviewed across all sectors and establishment size bands in England,
including establishments with 1-4 employees and the agriculture sector (who were not included in the
1999 survey). The size of the survey enables us to conduct detailed analysis of skill deficiencies by
establishment size, region, sector and occupation.
Key findings
The survey found that one in ten employers reported a skill deficiency of some kind (either a skill
shortage vacancy or an internal skill gap). Other key findings are:
 14% of establishments reported a vacancy at the time of the survey, 8% reported a hard-to-fill
vacancy and 4% a skill shortage vacancy. From this, the survey estimates there were 766,000
vacancies, of which 358,000 were hard-to-fill, of which 159,000 were skill related.
 7% of establishments reported an internal skills gap in the survey; 803,000 employees were
estimated to be below the desired proficiency for their jobs at the time of the survey.
 Around a third of employers provided off-the-job training to their employees in the 12 months
prior to the survey. Where establishments reported a skill deficiency, they were more likely to
engage in such training.
 Headline findings from this year’s survey can be compared to the survey conducted in 1999 by
excluding establishments with fewer than 5 employees and the agriculture sector from the
analysis. This analysis shows that the reporting of skill shortage vacancies and internal skill gaps
have both decreased slightly this year. However, there are areas where problems have increased.
These include skill shortage vacancies amongst professional and elementary occupations and skill
gaps amongst elementary occupations and the hotels and restaurants sector.
Background
In 1999, the Department for Education and
Skills (formerly Department for Education
and Employment) commissioned the Employers
Skill Survey 1999 (ESS1999) as part of a
major inquiry into skill deficiencies on behalf
of the National Skills Task Force. Based on a
survey of 27,000 employers, ESS1999 was
able to give a definitive account of the
extent, causes and implications of skill
deficiencies.
The Employers Skill Survey 2001 (ESS2001)
replicates ESS1999 in large part, but includes
establishments with between 1 and 4
employees, and those in agriculture, both of
which were excluded from ESS1999. As such
ESS2001 provides a more comprehensive
picture of the shortfall in skills across
England from an employer perspective.
Interviews
were
conducted
between
November 2000 and April 2001.
Skill Deficiencies – a definition
Two different kinds of skill deficiency are
investigated in the survey:
 external recruitment difficulties, focusing
in particular on hard-to-fill vacancies and skill
shortage vacancies, (hard-to-fill vacancies
explicitly attributed to a lack of job
applicants
with
the
required
skills,
qualifications or work experience)
 internal skill gaps (defined as occurring
where a significant proportion of existing
staff in a particular occupation are not fully
proficient at their current jobs).
Key findings:
Recruitment Difficulties
Approximately 14 per cent of establishments
reported vacancies at the time of the survey,
around 8 per cent of establishments reported
hard-to-fill vacancies, and 4
reported skill shortage vacancies.
per
cent
The proportion of establishments reporting
vacancies, hard-to-fill vacancies, or skill
shortage vacancies rises quite sharply with
the number of people employed. For instance,
3 per cent of establishments with 1-4
employees reported skill shortage vacancies
compared to 15 per cent with 500-999
employees.
Yet because the smallest
establishments are so numerous this is where
many of the vacancies (29 per cent of all
vacancies), hard-to-fill vacancies (34 per
cent), and skill shortage vacancies (40 per
cent) occur.
Skill shortage vacancies were predominantly
located in professional, associate professional
and technical and skilled trade occupations
(together accounting for over half of all skill
shortage vacancies). Though skill shortage
vacancies were found across all sectors they
were concentrated in construction and
business services. The data also demonstrate
that a greater number of skill shortage
vacancies were found in the London and South
East regions, both of which have experienced
strong employment growth over recent years,
but there were greater concentrations
(measuring skill shortage vacancies as a
proportion of all vacancies and as a proportion
of employment) in the South West and
Eastern regions.
Technical and practical skills other than IT
were sought for 34 per cent of skill shortage
vacancies. Advanced IT/software skills and
customer handling skills were sought for 20
per cent and 16 per cent of such vacancies
respectively.
Skill Gaps
Two measures of skill gaps are presented in
the report. A broad definition includes all
establishments that reported that at least
some of their staff lacked full proficiency.
23 per cent reported such internal skill gaps,
equating to around 1.9 million employees.
These were the impacts reported for 34 per
cent and 50 per cent of skill shortage
vacancies respectively.
A second measure includes only those
establishments where a significant proportion
of the workforce was reported as lacking
proficiency. 7 per cent of establishments
reported skill gaps using this narrow
definition, equating to around 803 thousand
employees. It is these skill gaps that are
followed up in the survey with further
exploration of their causes, consequences and
characteristics.
The main effects of internal skill gaps on
business performance were reported as
difficulties introducing new working practices
(32 per cent of establishments reporting
internal skill gaps) and increased operating
costs (32 per cent). Almost a quarter of
establishments with skill gaps also reported
the more serious impacts of either a loss of
orders (23 per cent) or delays developing new
products (24 per cent).
The types of skills sought by employers for
internal skill gaps tended to lean more
towards generic skills than is the case for
skill shortage vacancies. Communication skills
were required for 41% of all internal skill
gaps, and team working, customer handling and
technical/practical skills cited for around a
third each of all internal skills gaps.
Latent Skill gaps
Latent skill gaps refer to a situation where
establishments fall short of what might be
considered good or best business practice and
is reflected in relatively low skill levels and
relatively poor business performance, even
though there is no report of recruitment
problems or skill gaps.
There are some
indications from ESS2001 that such latent
skill gaps may exist, for example in the
findings that establishments with skill
deficiencies are more likely to have formal
written business plans and are more likely to
have plans to improve either the quality of
their product/service and/or the efficiency
of the production process.
Such factors
suggest a correlation with more dynamic
business strategies and the identification of
skill deficiencies, which suggests that if other
establishments were to adopt similar
practices, they might identify hitherto
unrecognised skill gaps.
The reporting of internal skills gaps was more
prevalent amongst Personal Service and
Operative
occupations
and
in
the
manufacturing and hospitality sectors.
Looking to the future, employers reported
that the skills they were most likely to
require in the next 2-3 years were advanced
IT/software skills (33 per cent of all
establishments), followed by basic computing
(21 per cent), and technical/practical skills
other than IT (18 per cent).
Business performance
The evidence points to skill shortage
vacancies and skill gaps having an impact on
business performance.
‘Loss of orders’ or ‘delays developing new
products or services’ may be considered to be
severe impacts on business performance.
Training
Training was commonly cited as a response to
skill deficiencies by employers (e.g. a response
to 72% of internal skill gaps) and also as a
cause of internal skill gaps in particular
(“failure to train and develop staff” was cited
as a cause of a third of all internal skill gaps).
However, when asked about barriers faced in
maintaining fully proficient staff, the most
frequently cited barriers were a lack of time
for training (31 per cent of establishments) a
lack of cover and a lack of funding for training
(both 23 per cent). It is apparent that
training is a factor in the cause and solution
of skill deficiencies.
Approximately 35 per cent of establishments
funded or arranged off-the-job training. On
average, establishments provided around one
fifth of their staff with off-the-job training
over the past 12 months.
Overall, where establishments reported a skill
deficiency they were more likely to engage in
training and train a greater proportion of
their staff, compared to establishments that
reported no skill deficiencies.
and in the South East region, as well as skill
gaps
amongst
elementary
occupations,
amongst the hotels and restaurants sector,
and in the North East, South West and West
Midlands regions.
The
full
report
can
www.skillsbase.dfes.gov.uk
be
The reporting of skill shortage vacancies and
internal skill gaps have both decreased in this
years survey. Vacancies were reported by 27
per cent of establishments in 2001 compared
to around 32 per cent in 1999. Skill shortage
vacancies were reported by 8 per cent of
establishments in 1999 compared to 6 per
cent in the 2001 reduced sample.
The
reporting of internal skill gaps has also
declined, from 20 per cent of establishments
in 1999 to 16% in 2001.
Both
these
measures
suggest
skills
deficiencies are not as severe in this survey.
However, there are areas where problems
have increased. These include skill shortage
vacancies
amongst
professional
and
elementary occupations, amongst the business
services and health and social care sectors,
via
Copies of this Research Brief (RBX 14-01) are
available free of charge from DfEE Publications, PO
Box 5050, Sherwood Park, Annesley, Nottingham
NG15 0DJ (tel: 0845 6022260). Research Briefs and
Research Reports can also be accessed at
http://www.dfee.gov.uk/research/
Further information about this research can be
obtained from Carol Stanfield, Room W626, DfES,
Moorfoot, Sheffield S1 4PQ.
Email: carol.stanfield@dfes.gsi.gov.uk
Comparisons to the 1999 survey
Headline findings from this years survey can
be compared to the survey conducted in 1999
by excluding establishments with fewer than
5 employees and the agriculture sector from
the analysis.
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